AND ...Gov't to unveil plan to shrink some home loans (foreclosure, second mortgage)

[FlaLadyB]

AGAIN...I can't post the whole story.. so please read..

It has several additional components. The plan also will require the more than 100 mortgage companies participating in the administration's existing foreclosure prevention program to consider slashing the amount borrowers owe. They will get incentive payments if they do so.

It also will include three to six months of temporary aid for borrowers who have lost their jobs. And there will be additional payments designed to give banks an incentive to reduce payments or eliminate second mortgages such as home equity loans — a problem that has blocked many loan modifications.

Gov't to unveil plan to shrink some home loans (http://www.palmbeachpost.com/money/real-estate/govt-to-unveil-plan-to-shrink-some-home-445442.html - broken link)

[stevep111]

The thing is that the County devalued my home to less than what I paid (doesn't mean that much) but how would I ever know if I were underwater unless I paid a bank for an appraisal? Also since I have been so responsible I would not be eligible if I lost my job. I will still have income but my payments would put me against the wall but not in the category of the people who are in this mess. Those people for the most part are people who have way too much debt and way too much house.

Everyone who lives at or below their means will end up paying for it. Don't get me wrong because I think we should bail some people out but the banks will be in a win win situation. They can lower the payments and still bet on the house being foreclosed on. If it is then they have the borrowers money and the value of the house when the market goes back up.

I believe there are some states that may still have a law that if someone owes money and they lose property the property then can only be sold for what is owed and if there is a proffit that money is returned to the person who lost the house. This prevented banks from driving people out of their homes by changing rates in good times when the market was to their advantage.

If we had that same law as a federal law then what it would allow the government to do is forgive the borrower his/her credit rating and allow them to re purchase either their own home at what is owed on it or buy a house they can afford. It would also prevent the Banks from proffiting off of peoples misery. Instead of rewarding bad behavior it would give people the chance to right their ship.